by Mitch Kokai
Senior Political Analyst, John Locke Foundation
On cue, Paul Krugman, a New York Times columnist and Nobel Prize-winning economist, expressed his frustration last Thursday at the apparent disconnect between the public’s perceptions of the economic health of the country and the statistics.
I say “on cue” because President Joe Biden’s approval rating remains in the dumpster. The poor economy is one major reason.
Not so, according to Krugman. The economy is “booming,” said Krugman. He noted that Biden’s recent State of the Union made that clear. Last year, the United States added 6.5 million jobs, which was more than ever created in a single year. Krugman fact-checks these claims and declares them “entirely correct.” Of course, to any sensible person, these added jobs were not created in any sense of the word. The economy is still, by most employment measures, attempting to recover from the 2020 lockdowns and the associated transfer of wealth from Main Street to Wall Street.
For instance, the labor force participation rate has yet to recover. The labor force participation rate is the proportion of the population that is either working or looking for work. During Donald Trump’s presidency, the prime age, 25 to 54 years of age, labor force participation rate finally recovered to the level it was before the 2008 recession. Unfortunately for the average person, labor force participation is still low by comparison. The U-6 unemployment rate, which takes account of those who are marginally attached to the labor market or employed part time for economic reasons, actually ticked up in February while Biden was crowing about the strong economy he allegedly created.
But what about GDP growth? Isn’t it true that Biden oversaw the greatest growth in real GDP in decade in the last quarter of 2021? Again, this is a recovery story. After the lockdowns ended, GDP began to climb back to the Trump trajectory it was on. The outlook for this year is much different.